Does Welfare Participation Reduce Health-Related Financial Hardship Among Older Adults: Evidence from Rural China

Health-related financial hardship threatens older adults' economic security in low- and middle-income countries. Using data from four waves (2011-2018) of the China Health and Retirement Longitudinal Study (CHARLS) and employing a fuzzy regression discontinuity design, the study examines the effect of rural Dibao - one of the world's largest social assistance programs - on catastrophic medical expenditure and poverty with adjustment of out-of-pocket (OOP) medical expenditure. The findings show that Dibao receipt reduces the probability of catastrophic medical expenditure and the likelihood of falling into OOP-adjusted poverty among older adults near the eligibility cutoff. Higher benefit levels and more sustained Dibao receipt are associated with greater reductions in OOP-adjusted poverty. Heterogeneity analyses reveal stronger effects on catastrophic medical expenditure among the older-old, individuals with disabilities, and those living with a spouse or children. Our findings suggest that means-tested social assistance programs, such as rural Dibao, have the potential to mitigate health-related financial hardship among older adults in some low- and middle-income settings.